European markets opened on a dovish tone, alongside US futures, after Asian stocks sparked the trend overnight. Today’s global risk-off trading stance follows negative developments in Hong Kong (credit rating downgrade) and growing concerns about a new deadly coronavirus in China. These two negative leverages were enough to lead investors to take a break, and some profit, after the recent run of good news for global stocks (strong start to earning season and initial US-China deal).
Photo by Claudio Schwarz Purzlbaum.
However, in addition to the worrying developments from China, the Stoxx-600 Index is also being weighed down by the financial sector, particularly after UBS disappointed investors by falling short on key profitability levels and cost targets. Tech shares are also among the worst performers today as the French GAFA tax continues to worsen the US-EU trade relationship despite attempts from EU trade chief Hogan to ease tensions between the two economic areas.
All sectors are down on the Eurostoxx-50, with the German DAX-30 and the CAC-40 in Paris the worst performers. The CAC-40 Index is testing its first available support level, near the 23.6% retracement above 6,010pts. A break-out of this level could pose a serious threat to the current bullish trend with the next support down at 5,950pts.
